Zero Interest Credit Cards – Should You Apply For One?

Before signing up for a credit card with zero interest rate, there are some factors that should be considered. On this post, let’s take a moment to ponder some points about zero interest credit cards.

Is 0% APR Credit Card for ME?

First, do you really need to get a new credit card at this time? What is your main reason for acquiring a new credit card? Do you need it to transfer your balances from your high-rate credit cards? If yes, then you need to look for one that not only offers zero interest but a credit card that will provide you with sufficient zero-rate period.

How do you plan to pay your transferred balances? If your purpose is to consolidate, you need to create a doable repayment plan to make sure that you can finish your payments before the zero interest period ends. Keep in mind that some 0% APR credit cards may penalize you with expensive late fees if you fall behind your due dates.

Choosing a Zero Rate Credit Card – Factors to Consider

It’s also important to check all the fees associated with a credit card. For instance, some credit cards with zero introductory rate may come with very high annual fees. Annual fees can range from $70 to $100 on some credit cards. If you have to pay that amount on a yearly basis, seriously consider if the credit card is worth keeping.

Furthermore, a credit card may carry more than one rate of interest. The zero rate may only apply to balance transfers but not to purchases or cash advances. A separate APR may be applicable to these two transactions. Hence, you need to be careful about using your credit card on purchasing, paying bills, or taking out cash advances from the ATM.

Weigh the costs and compare it with the savings you can get by not paying the interest rate. If you have to pay high maintenance fees to keep your credit card account active, those charges may be offsetting your savings after all.

Last but not least, you need to consider your chances of approval. Most zero interest credit cards require good to excellent credit history. If you have an average credit rating, you may not qualify for the 0% APR offer or your application may get declined. Thus, before sending your application, check the issuer’s credit requirement and check your personal credit report. Remember, getting declined by a creditor may only cause damage to your credit rating.


About the Author:

Suzy Vanstrusen is a credit analyst and a writer on the website She has been providing consumers with tips and wise information about credit repair as well as helping you out more with your bad credit loans.  Copyright © 2010

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